The European Comission will present next month law designed to convert the European Union in a leading center for semiconductor manufacturing and domain and experience with chip-related processes. This has been stated by the President of the European Commission, Ursula von der Leyen, in a speech at the World Economic Forum.
The objective of this law is to facilitate the growth of chip production in the EU by 20% by 2030. That is, to quadruple current chip production in the European Union. To achieve this, yes, it will be necessary (and will be used) state aid for the construction of new state-of-the-art factories. This would reduce the current dependence on Asian plants, since according to von der Leyen «Currently, most of our supplies come from a handful of manufacturers outside of Europe. And it is a dependency and uncertainty that we simply cannot afford.«.
For this reason, he underlines that they will create «more balanced interdependencies“, in addition to “develop supply chains we can trust by avoiding single points of failure«. Doing so, and reducing the distance required for the chips to reach their destination in Europe, not only reduces the environmental impact of chip manufacturing. Also its costs, since it will not be necessary to add to those of its manufacture those of the fuel necessary for its transport.
The European Chip Law could potentially open the door for EU governments collaborate to finance of the commissioning of these plants. Above all with the aim of encouraging chip manufacturers to give a boost to their operations in the area. An objective that the European Commission wants to meet at all costs, since, as von der Leyen recalls, “the need for chips in Europe will double over the next decade. That is why we need to radically increase the weight of Europe in the development of production».
Until this comes, the three major chip development companies, TSMC, Samsung and the Chinese CMUThey have no presence in Europe. Most of its production capacity is in Asia, and to a much lesser extent in the United States. Between the three they accounted for 77% of the world’s semiconductor sales revenue during the third quarter of 2021.
The fourth of the major chipmakers, GlobalFoundries, has factories in Dresden (Germany), but the chips it manufactures only generate 6% of total global revenue. Intel also has facilities in Ireland, which are just now being upgraded to produce 7-nanometer chips by 2023. It is also considering a major expansion plan for its semiconductor manufacturing capacity on the European mainland.